Written by: Shauna Weatherly, President of FedSubK, SME Advisor to GovPort
With its inception in the 1994 Federal Acquisition Streamlining Act (FASA), the Woman-Owned Small Business (WOSB) Federal Contract Program's intent is clear: ensure that women-owned businesses, historically underrepresented in government contracts, gain equitable access to federal opportunities. While the program has made significant strides, challenges remain.
Here we’ll explore the program’s history, achievements, and actionable strategies to help WOSBs stay competitive and policy makers improve the program’s effectiveness.
The WOSB Federal Contract Program aims to address women’s underrepresentation in federal contracting with a 5% contracting goal. Although set-asides and sole-source contracts were authorized in 2000, legal and procedural challenges delayed implementation until 2011—17 years after the initial goal was set.
While subcontracting goals for WOSBs have been consistently met since FY2008, the 5% prime contracting goal has only been reached twice (2015 and 2019). Systemic barriers and limited opportunities persist, highlighting the need for better program implementation and management.
Several obstacles impede the WOSB program's full potential, including:
The WOSB Program is the only federal contracting program that restricts the use of set-asides to specific NAICS codes. While the intent is to focus on areas of greatest disparity, these limitations inadvertently restrict opportunities for WOSBs compared to other Small Business Administration.
The underutilization of Women-Owned SmallBusiness (WOSB) set-asides raises two key concerns:
On the surface, the WOSB prime award achievements appear to reflect the number of contract dollars awarded underset-asides. But that’s not the case. WOSB achievements also include prime awards to self-certified and certified WOSBs under small business set-asides and self-certified WOSBs under unrestricted procurements.
Considering only the WOSB set-aside numbers alone, we see the underutilization of the WOSB set-aside authority due to insufficient awareness and training among the acquisition workforce, inadequate program advocacy, and overly restrictive requirements deterring action on WOSB set-asides.
In FY2021, of the 891 NAICS codes used for purchasing across the federal government, 82% of those NAICS are listed as those where WOSBs were underrepresented or substantially underrepresented. However, many of these opportunities are not seriously considered for WOSB set-aside opportunities though hundreds of WOSBs are successfully registered under these NAICS. This begs the question, why not?
Businesses complete a rigorous certification process to compete for WOSB set-aside or sole-source contracts. However, the certification process itself presents significant challenges that limit the program’s reach and effectiveness:
● Third-Party Certifiers: Many businesses are burdened by delays, high costs, and non-responsiveness from SBA-approved third-party certifiers because of delays with application processing at SBA. There are few avenues for resolution or SBA intervention to assist when these delays occur. However, with MySBA Certifications, we hope to mitigate some of these processing delays.
● Complexity: The process is seen as overly complicated, discouraging smaller businesses from pursuing certification. SBA checklists fail to list all documents necessary for submission, resulting infrequent starts and stops to the application process.
The FAR grants contracting officers the authority to set aside contracts for WOSBs or make sole-source awards under specific circumstances. However, this authority is often underused due to alack of training, understanding, and use:
● Outdated WOSB training resources: Training on utilizing small businesses is typically part of an acquisition certification. However, mandatory refreshers are rare despite small business rules often changing between fiscal years. Changes go into effect, and the acquisition workforce is left to figure it out themselves.
● COVID-19 delays: Pandemic-related disruptions further compounded the lack of up-to-date training for the acquisition workforce.
Accountability measures for achieving WOSB contracting goals are somewhat weak, leading to inconsistent performance across federal agencies and within.
● No penalties for non-compliance: Agencies face minimal consequences for failing to meet the 5% WOSB prime contracting goal. There is no structured avenue for a WOSB to appeal a contracting officer’s decision not to use a WOSB set-asides.
● Double counting awards: Current reporting practices include double counting awards made in Puerto Rico and U.S.Territories and under local set-asides in support of natural disasters.
● Counting self-certified WOSBs: As previously mentioned, awards to non-certified WOSBs under small business set-asides and full-and-open competition awards inflate the appearance of success while masking the limited impact of WOSB-specific programs.
The WOSB program has been hampered by delays and legal challenges, starting with its implementation, which was postponed by over a decade.
Further policy constraints:
● Inconsistent use of “shall” and “may” in the guidance provided to COs in utilizing the SBA federal contracting programs between FAR Subparts 19.502 and FAR19.1505
● FAR 19.502-2 (b) states the CO“shall” set aside any acquisition over the simplified acquisition threshold for small business participation when there is a reasonable expectation that (1) offers will be obtained from at least two responsible small business concerns, and (2) award will be made at fair market prices (AKA “the rule of two”).
● FAR 19.1505(b) and (c) state that for requirements exceeding the micro-purchase threshold (presently $10,000) the CO “may” restrict competition to eligible EDWOSBs and WOSBs under the NAICS codes designated by SBA as underrepresented and substantially underrepresented and “the rule of two” can be met.
● FAR19.1506(a) and (b) state the CO “shall” consider sole source awards to eligible EDWOSBs and WOSBs in NAICS codes designated by SBA as those whereWOSBs are underrepresented or substantially underrepresented, AND the CO does not have a reasonable expectation that offers would be received from two or more EDWOSB or WOSB concerns.
To overcome these challenges, WOSBs can consider these approaches:
● Leverage certifications strategically. While the certification process may seem cumbersome, it’s essential for women-owned businesses aiming to compete for set-asides or receive sole-source contracts.Keep an eye on WOSB-eligible NAICS codes and ensure your capabilities align accordingly.
● Monitor federal contracting opportunities. Develop a proactive approach to federal procurement by collaborating with the Office of Small and Disadvantaged Business Utilization (OSDBU) at federal agencies to stay informed about upcoming contracts and advocate for WOSB set-asides. Seek out opportunities in agency procurement forecasts and engage the agency point of contact when the acquisition strategy has yet to be determined.
● Focus on compliance and long-term growth. Ensure your business remains compliant with certification requirements and federal regulations while scaling. Diversify your revenue streams by competing in both set-asides and full-and-open competitions and consider subcontracting.
● Advocate for policy improvements. Join industry organizations like Women Impacting Public Policy (WIPP) or the National Association of Women Business Owners (NAWBO) to advocate for eliminating NAICS code restrictions, enhancing accountability for unmet goals, and increasing training for contracting officers.
Policymakers and stakeholders should consider the following recommendations to strengthen the WOSB program:
● Increase the prime contracting goal: Gradually raise the 5% goal, as was done for Small Disadvantaged Businesses, to encourage agencies to allocate more resources to WOSBs.
● Expand training: Mandate specialized training on the WOSB program for contracting officers to improve awareness and utilization to reach the current 5% goal.
● Mandate procurement forecasting: Require agencies to identify projects that meet WOSB goals and conduct proactive outreach, particularly if the agency has not met the 5% goal in the past several fiscal years.
● Enhance accountability: Implement corrective action plans for agencies failing to meet goals and increase transparency in the reporting of awards under WOSB set-asides and sole source actions.
The WOSB Federal Contract Program holds immense potential to transform opportunities for women entrepreneurs. While progress has been made, further improvements to the program require a concerted effort from lawmakers, policymakers, agencies, and the business community. ForWOSBs, staying informed, leveraging certifications, and advocating for meaningful policy changes can make a meaningful difference as you navigate federal procurement.
Learn more about how GovPort can help make prime-to-sub management easier.
